News
OOIDA lawsuit update
Judge orders Arctic Express to pay up

By Coral Beach
staff editor

 

A new payment schedule is in place in relation to a federal class action that pitted drivers against

Arctic Express Inc. The case involved the motor carrier’s failure to return escrow money to truckers.

On Jan. 14, the judge in the case filed an order that included the new payment schedule.

A Dec. 14, 2007, hearing had been scheduled, at which the judge had said he would find Arctic in civil contempt of court if the defendants did not show cause why they failed to meet his previously imposed payment schedule.

Just before the Dec. 14 contempt hearing, the motor carrier’s officials contacted the truckers’ legal team and said they had secured funds to satisfy outstanding amounts.

Arctic paid $205,000 on Dec. 21, which included payment of principal interest and penalties under the previous schedule. Having received that payment, the truckers’ attorneys anticipate another distribution payment to class members soon.

On Dec. 27, the judge met with the legal teams representing the truckers and the motor carrier for a mediation hearing. He devised the new payment schedule after that mediation session.

As of Jan. 1, Arctic still owed the truckers in the class action $565,000.

The case was originally filed June 30, 1997, in U.S. District Court, Southern District of Ohio. On July 16, 2004, the judge approved a settlement and awarded attorney fees. He awarded the truckers damages and interest totaling more than $5.58 million. Because of bankruptcy, the carrier was allowed to agree to pay only $900,000.

Arctic made two payments of $75,000 each, but failed to make payments in June and December of 2006 totaling $250,000. The judge approved a revised payment schedule in the summer of 2007, but Arctic defaulted on the first payment, which was due July 25, 2007.

In related action, OOIDA has filed a federal suit against Comerica Bank to recover the balance of the $5.58 million.

The Association contends that the bank improperly used drivers’ escrow money to meet Arctic’s financial obligations and should therefore pay the balance. LL

 

C.R. England expects to finish escrow accounting soon

By Coral Beach
staff editor

Accounting work has begun, and thousands of truckers may be one step closer to recovering money from C.R. England Inc. in relation to unlawfully retained escrow funds. The escrow funds include a maintenance reserve account, a performance bond and a fuel/road tax escrow.

Lawyers representing the Utah-based motor carrier have told Judge Ted Stewart that they expect to have the accounting of the owner-operators’ escrow money done by March 20. A hearing is set for June 2, and the judge is likely to rule then on whether C.R. England is required to return the funds to individual class members and, if so, in what amounts.

The case was originally filed in June 2002 and transferred to the U.S. District Court, District of Utah. On Oct. 3, 2006, Judge Ted Stewart issued favorable pretrial rulings for the truckers, marking the first time a federal court ruled that carriers’ leases must disclose markups and fees on chargebacks. The trial was in late October 2006.

On June 20, 2007, the judge ruled in the case, siding with the truckers on some issues. The judge found that the lease C.R. England used from 1998 until the summer of 2002 violated the leasing regulations. He also ruled that the new lease agreement the company has been using since the summer of 2002 is completely compliant with the federal leasing regulations.

Jim Johnston, president and CEO of OOIDA, said he was encouraged that the judge has ordered C.R. England to account for every penny of every escrow fund. LL

 

coral_beach@landlinemag.com

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